Zomato waives off reservation fee for restaurants as it looks to widen its restaurant base

Zomato is using every trick in the book to stay ahead in the food tech race against Naspers-backed Swiggy.

To strengthen its most recent offering, the online restaurant discovery and food ordering platform has waived off ‘per cover’ fee or platform fee for restaurants that enable table reservations through Zomato.

“Retrospectively from June 1, 2017 onwards, our restaurant partners will not need to pay a “per cover” fee or even a platform fee to accept seamless digital table reservations from Zomato. Yes, the service will be completely free,” said Zomato CEO Deepinder Goyal in a blog post on Tuesday.

The move follows Zomato’s 1 million reservations mark clocked in September through the one-year-old table reservation offering, a move that Goyal claims makes Zomato the largest in 3 of the 4 countries where the service is available. Currently, Zomato offers table reservation services across 10,000 restaurants in India, UAE, Philippines and Australia.

The Info Edge-backed firm is betting on the move to waive reservation fees to help onboard more restaurants for this service. Currently, Zomato has over 1.4 million restaurants listed on its platform and addition to this base will help advertising revenues for the company, one that forms about 75% of its revenue share.

Zomato has been offering incentives to restaurants to bolster its various businesses beyond listings as well. ET had reported last month that the online food ordering platform had changed its commission structure for restaurant partners waiving off commission charges for restaurants clocking over 50 orders a week.

The shift in commission structure, came shortly after the company claimed to have reached profitability in all 24 markets, and does not include a waiver of platform fees, delivery charges and payment gateway charges for restaurants.

For Zomato, the food ordering service is available on 25,000 restaurants on its platform of which about 7,500 are exclusive to the Gurgaon-based company. In this offering, the company competes with Bangalore-based Swiggy which currently has over 18,000 active restaurants for delivery and listings.

To be sure, Swiggy’s 18,000 strong restaurant base covers India alone while that of Zomato’s includes India and UAE as far as food ordering goes.

The food ordering business which forms about 20-25% of Zomato’s revenues helps the platform clock 3 million orders a month, falling behind Swiggy’s 4 million monthly orders.